Meta

Retail and dropshipping profits in danger : Amazon.com

Standard

It’s a relatively quiet topic but all retailers are in danger of being victims of Amazon.com. Why? Amazon is the most successful retailer online but what most people don’t realize is that Amazon is out for blood! Amazon’s latest techniques involve shady practices such as figuring out which FBA (Fulfillment By Amazon) products sell successfully. What does this mean? If you use FBA and you are a “top seller”, say you sell 1,000 products by month, it is common knowledge that Amazon could (or more likely, will) reject your product at some point so that they can source your product directly from China and to sell it themselves.Can you say ‘Modern Day Monopoly?”.

Now, you might think that the chances of Amazon stealing your products or ideas is slim if you are a smaller business but the fact is that if you are an entrepreneur or an aggressive salesperson that you could be fighting a losing battle.

I hesitate to identify my products that this has happened to but I will share them when appropriate. For now, you should Google your products and compare them to the price they sell for on Amazon.com and figure out a way to compete.

Here’s how it works, if you are fortunate to have a “hot seller” I’m certain that Amazon either already sells that product at a cheaper price OR they will sell it soon enough. The real problem is that you might be able to compete with Amazon’s price BUT there is little chance that you can compete with Amazons “Free” shipping.

So here’s the deal, Amazon latches onto successful selling products and then has no problem earning $0.50 or $1.00 per sale (who can live off that?) as they put their competitors out of business. Once enough competitors are out of business then they’ll raise their prices to an acceptable profit level as they deem fit.Pretty scary, huh?